Wednesday, March 18, 2020

Will Universal Basic Income Save The Economy?

Don't be so quick to object.

I am no economist although I did do Economics A Level, and this is a blog post not an in-depth analysis based on hours of academic research. That said, here are some half-baked ideas after reading a few popular articles about how to save the economy. Please feel free to discuss it with me in the comments or on facebook but don't be rude. This is an idea that deserves a conversation at least.

The idea of a universal basic income (UBI) is not new. It means that every individual gets a government grant to cover rent, modest utilities, basic clothing, and food. Here are some benefits of this system:

1. Basic needs. No one need worry about basic needs.2. Social benefits. UBI is given to individuals, not households, so people in difficult marriages would be able to leave but otoh, it would encourage people to live in families or shared accommodation in order to pool resources.3. Lifestyle, health and relationships. More free time will allow people to do more voluntary work, invest in family relationships, be less stressed, and pursue employment that makes them happy rather than being forced to take jobs they hate.4. Empower the workforce. Workers will not need to accept bad working conditions as they can now walk away. As an example, I would rather work in a shop than clean a school or hospital. As no one needs to clean a school to keep a roof over their heads, less desirable jobs like this would have to pay more in order to attract employees. Some people with limited employable skills would take these jobs because they pay more than easier employment.5. The corona effect. After corona we will have proved that working remotely is effective. Fewer employees need to live close to work. This will allow people to move back to once thriving but now dying towns where there is plenty of cheap housing. More housing can be built in sparsely populated areas far from the centres. This will reduce demand in the centres and rents/house prices will go down. Meanwhile in the new areas, they will need new schools, shops and other services to help build up a thriving economy and society. Living will be cheaper.6. Increased employment opportunities. Shared and part time employment will distribute the available work hours among more people. No one will need to work 10 hours a day so most people will opt to work fewer hours.

Some potential problems and why they're not necessarily founded.

1. Where will the money come from? Other social benefits, including pensions, will be stopped. Most people will still work and be taxed (see below). Increase taxation on carbon footprints for industry and commerce, not individuals. Inheritance tax (this one hurts but it encourages people to spend, it encourages a slower pace of life i.e. not chasing wealth that you'll never spend and in a fairer society it evens out the starting line). Property and land tax. VAT.2. Why would anyone work? Because most of us want to go out to eat once in while, go on holiday, travel a bit, buy things other than basics, upgrade our lifestyles, pursue hobbies, redecorate, etc... Also, we live in communities where we need to keep up with the social norms be it hosting barbecues or evenings/days out with friends.
Most people want to feel useful, the social aspect of getting out and meeting people, idleness becomes boring after a while.
There will also still be a status attached to contributing to society, a moral aspect that most of us will buy into as we already do.Notes:
*When I write 'most people' this is just my opinion not a proven statistic.
*Although limited experiments on UBI have been done around the world and it seems that my opinion is largely supported.
*I have not done the maths and I have no idea if this is financially viable.
*I wouldn't even know how to do the financial analysis of this.
*I'm not recommending UBI but rather opening the conversation.
*There are many articles online about UBI, just google it.
*I did google it so please don't send me the articles you find online. Just comment on what you found interesting.

2 comments:

Interesting points and this is something that gets revisited again and again although it has only been done as an experiment as far as I know in a few countries.We got an announcement on finances this morning from the PM and then various banks & organizations..Unemployment insurance benefits will kick in right away for those who have been laid off - no waiting period..For those in temp jobs, self-employed, told to quarantine or having to stay home to look after children there will be an EI type benefit that will pay out a similar amount (about $900 every two weeks) for the next 15 weeks..Banks will defer mortgage payments for six months.Banks are also looking at extending credit & deferring some CC payments.Utilities etc. are to allow late payments with no penalties & no cutting them off.Child tax credits go from $500 to $800.This years taxes which are normally to be filed April 30th has been deferred to June 1 - if you owe it can wait until August for payment..Student loan payments on hold.6 largest grocery companies have pledged no price increases and many are allowing seniors only to shop in the first hour of opening when things are still clean and it's less crowded.

.All kinds of financial deferments and aid for various businesses to try and get them through..Extra money for shelters & indigenous communities to help some of the most vulnerable

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At the age of 46 and four years after I started the IVF process, I brought home my beautiful DD. This a blog about a woman for whom not being a mother was unacceptable. Add to the mix that I'm also an Expat, Jewish, British, Israeli (sort of), Single, a Teacher, a Writer, a Homemaker, an almost Vegetarian (it's a process), a recent Minimalist, and you have Midlife Singlemum.

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